The Ifo Business Climate and the German Economy

The most well-known indicator for economic development in Germany is the Ifo Business Climate Index, which is composed of the monthly Ifo surveys on the economic situation and business expectations. Analyses show that the Ifo Business Climate is a reliable indicator for economic activity in Germany. The relation between GDP growth rates and manufacturing production growth rates is higher than for comparative indicators, such as the ZEW index, for example. The Ifo Business Climate Index is available on a timely basis, shows economic developments early on and is subject to no revisions. The Ifo Business Climate Index is thus rightly seen as the central indicator for assessing economic activity in Germany.